Speaker 1: Hi everyone. I'm Carol Masser Bloomberg, Business Week, Radio and TV,
Speaker 1: and I'm delighted to bring in Kathy Would. She's the founder, CEO,
Speaker 1: and chief investment officer of ARC Investment LLC. She is
Speaker 1: someone who is well known to our audience. Her consistent
Speaker 1: performance since she started ARC about seven years ago has
Speaker 1: certainly given her a lot of notoriety. Kathy, first of all,
Speaker 1: thank you for joining us. I know it's a crazy day.
Speaker 1: We're all watching the markets. We're all watching bitcoin in
Speaker 1: a big way. The crypto market is coming undone last
Speaker 1: trade was about thirty five thousand on bitcoin. What's happening
Speaker 1: right now and how low do you think it can go? Well,
Speaker 1: I think we're in a risk off period and for
Speaker 1: for all assets. If you if you look at the
Speaker 1: stock market, the more risky or volatile parts of the
Speaker 1: market have come in dramatically since mid February. And I
Speaker 1: think a lot of the concerns have been around inflation.
Speaker 1: Initially that was helping bitcoin because obviously Bitcoin is in
Speaker 1: a very important inflation hedge. You know, it's a it's
Speaker 1: a rules based monetary policy, the first global rules based
Speaker 1: monetary policy we have ever had. Hugely important reserve currency
Speaker 1: of the crypto acid ecosystem. But I think what's happening
Speaker 1: right now is because the stock market, the highly volatile
Speaker 1: part of the stock market, the innovation oriented part of
Speaker 1: the stock market, has gone through such a correction which
Speaker 1: has been flamed by inflation fears. I think, I think
Speaker 1: the correlations among volatile assets are going to one right now,
Speaker 1: and that's including bitcoin. Well, I want to unpack a
Speaker 1: couple of things. So bitcoin, I mean you, at one point,
Speaker 1: I think back in April told Dow Jones that it
Speaker 1: could go to about five thousand dollars. Do you still
Speaker 1: hold that target? Do you still think that's where we're headed?
Speaker 1: I we do. I do, yes. Cn L. Mandra is
Speaker 1: our crypto analysts, and and uh we we go through
Speaker 1: soul searching times like this and and scrape the models,
Speaker 1: and yes, our conviction is as high. The one thing
Speaker 1: that has changed here, however, is the environmental concerns around
Speaker 1: bitcoin in particular, have caused people like Elon Musk to
Speaker 1: pull away and say, who wha what whoa? Let me,
Speaker 1: let me, let me make sure I understand this. And uh,
Speaker 1: we believe that even this is going to change because
Speaker 1: first of all, right, now, UH, the percentage of bitcoin
Speaker 1: mind with renewables and hydroelectric power is quite substantial. I
Speaker 1: think in China it's over fifty in renewables. UH. And
Speaker 1: we also believe UH and we wrote a paper in
Speaker 1: conjunction with Square on this and we're going to have
Speaker 1: a conference about it in July. We believe that bitcoin
Speaker 1: mining integrated into the distributed grid, and by that I
Speaker 1: mean solar roofs, power walls in homes. UH, utilities, power
Speaker 1: producers starting to include bitcoin mining in the ecosystem. Why
Speaker 1: would they do that? They would do it because renewables
Speaker 1: are intermittent power sources, right, whether is it sunny or not,
Speaker 1: wind is it windy or not? And bitcoin mining could
Speaker 1: take off if it's If there's excess energy uh from
Speaker 1: solar being loaded into power walls, it can be offloaded
Speaker 1: into bitcoin mining and the whole ecosystem therefore becomes much
Speaker 1: more economic if this happens. We believe that the the
Speaker 1: adoption of solar is going to accelerate dramatically because there's
Speaker 1: another profit center associated with it, bitcoin mining. Well, what
Speaker 1: happens though in the meantime, so here we are at
Speaker 1: thirty five thousand, Kathy, do you think we go much
Speaker 1: lower from here? Uh? You never know how low is low.
Speaker 1: When a market gets very emotional, A lot of traders
Speaker 1: see bitcoin dropping below the two under day moving average,
Speaker 1: which is which was a uh so traders once that happened,
Speaker 1: they just dumped. Some just dump and run. I think
Speaker 1: we're in a capitulation phase. Ya. Seen has a dashboard.
Speaker 1: We were looking at all the indicators this morning. They
Speaker 1: are all suggesting that we are in the capitulation phase,
Speaker 1: which is a really great time to buy, no matter
Speaker 1: what the asset is. A capitulation phase is by it's
Speaker 1: on sale now. Am I saying thirty five thousand is
Speaker 1: the low? You know, if traders and there are a
Speaker 1: lot of speculators in in bitcoin, if they are running
Speaker 1: for the hills just because bitcoin has broken through a
Speaker 1: moving average that is important to them. It could continue.
Speaker 1: But all of our indicators are saying this is capitulation
Speaker 1: right now. Do you have a low point on your
Speaker 1: model for bitcoin? No, these metrics are are more a measure.
Speaker 1: Are we in a truly capitulation phase? And it's very detailed. Yes.
Speaker 1: Seen uses on chain analysis, which this is the only
Speaker 1: asset where you can see exactly who's doing what, when,
Speaker 1: why and how, and all of those metrics are saying
Speaker 1: this is a capitulation. This is as as bad as
Speaker 1: it got during the coronavirus crisis. So what about systemic concerns?
Speaker 1: And I'm not talking about bringing down the financial system,
Speaker 1: but you know, more and more of kind of the
Speaker 1: establishment are getting involved in bitcoin. A lot more companies
Speaker 1: have bitcoin on their balance sheet. Should we be concerned
Speaker 1: about their exposure? Tesla for one, but others yes, yes,
Speaker 1: well they're usually in the case of Square and Tesla,
Speaker 1: there between five and eight percent of their cash is
Speaker 1: in bitcoin. So I don't think so that's no cause
Speaker 1: for concern. I'm think about it. We were worried that
Speaker 1: Tesla would run out of cash. Of course ARC was
Speaker 1: not worried, but the world was worried two years ago
Speaker 1: that it would run out of cash. It has so
Speaker 1: much cash now that has the luxury to put five
Speaker 1: to eight percent in in Bickwood. So, uh. Micro Strategy
Speaker 1: is another company. It has almost all as cash and bitcoin.
Speaker 1: That's that's perhaps something prints you know, But as I said,
Speaker 1: if we are in the capitulation phase, we shouldn't be
Speaker 1: worried about micro strategy either. Uh. We do believe this
Speaker 1: is a new asset class and that institutions they are
Speaker 1: looking at it right now because the correlations of relative
Speaker 1: returns and total returns to compare to other asset classes
Speaker 1: tends to be very low over time, and so they
Speaker 1: have to look at it now. E s G might
Speaker 1: prevent a move in wholesale, but we do believe that
Speaker 1: once they understand how renewables are becoming incorporated into the
Speaker 1: bitcoin mining ecosystem uh, and that bitcoin mining might accelerate
Speaker 1: the adoption of solar UH. And I think Ellen will
Speaker 1: come back and be a part of that ecosystem as well.
Speaker 1: So why do you think he came out and said,
Speaker 1: wait a minute, maybe I'm going to back off a bitcoin. Um.
Speaker 1: What do you think his concerned was? What was his nervousness? Well,
Speaker 1: I think he moved in because he's been thinking, watching
Speaker 1: like we all have, basically unhinged monetary policies. They're not
Speaker 1: tied to anything anymore. Whereas bitcoin is mathematically meter to
Speaker 1: top out at twenty one million units and we're approaching
Speaker 1: nineteen million now, so the scarcity factor should increase and
Speaker 1: support the price. We do believe that is what is
Speaker 1: going to be supporting the price in here. I believe
Speaker 1: what happened after he took the position in bitcoin is
Speaker 1: he got pushed back from institutional shareholders like black Rock.
Speaker 1: If you've got Larry Fink, you know, beating the drum
Speaker 1: on climate change as one of the most important topics
Speaker 1: and problems of our time, Uh, then uh, he was
Speaker 1: going to have to face those sorts of concerns. I
Speaker 1: don't think he expected that. And now that he's sorting
Speaker 1: it out, learning more about the environmental impact, I think
Speaker 1: he'll come back into the mix. We certainly hope he will. Uh.
Speaker 1: I don't know if he's going to be part of
Speaker 1: the conference in in July or not. It would be
Speaker 1: he would be a very good addition because I think
Speaker 1: he would provide both sides of the equation. How quickly
Speaker 1: could the adoption of solar accelerate if we introduced mining
Speaker 1: into that ecosystem? Do you expect a bitcoin e t
Speaker 1: F to get approved anytime soon? And I'm curious if
Speaker 1: you plan to launch a crypto et F anytime soon?
Speaker 1: You know, I think with well now that uh Gary
Speaker 1: Gensler is head of the SEC. UH he's bitcoin friendly.
Speaker 1: We know that he taught a class. Uh. Of course,
Speaker 1: of course is at M I t we're coming back
Speaker 1: to the SEC, so and I think the research um
Speaker 1: uh professionals at the SEC. Uh, they understand bitcoin in
Speaker 1: particular and uh, and I think are much more comfortable
Speaker 1: with it now that we've had several years to digest
Speaker 1: what exactly it is. Go through a bear market, go
Speaker 1: through a bull market, now go through a bit of
Speaker 1: a bear market. I think watching uh, the ecosystem evolve
Speaker 1: and actually become even more anti fragile. You know, we're
Speaker 1: getting some real tests here. And if the system doesn't break,
Speaker 1: and I don't think it will, I think that their
Speaker 1: comfort will increase in a couple of ways. Number One,
Speaker 1: the infrastructure is there, is robust. Number two, the liquidity
Speaker 1: is there. Uh, I don't think. I don't think that's
Speaker 1: going to be disproven here. And number three, the price
Speaker 1: is down from very lofty levels. So hey, why not
Speaker 1: start an et F after a correction in in the
Speaker 1: market than before. So I actually think the odds are
Speaker 1: going up now that we've had this correction. I don't
Speaker 1: know if it's going to be this year or not.
Speaker 1: We here perhaps fourth quarter, but you know we heard
Speaker 1: a third quarter before that, so as we get closer
Speaker 1: to the fourth quarter, will know how much is being
Speaker 1: pushed out. Hey, I want to ask Fee a bit
Speaker 1: more about Tesla. Obviously, you know you've been at their
Speaker 1: front and center years ahead when everybody was turning their
Speaker 1: backs on Tesla taking another hit the news out of China.
Speaker 1: They have certainly had some tough time. Their growth is
Speaker 1: sload substantially. They've had a lot of headaches uh and
Speaker 1: and protests in Shanghai after some accidents with its cars.
Speaker 1: Is the Chinese market at risk for Tesla? I think
Speaker 1: the Chinese mark China is going to favor its local
Speaker 1: producers like Neo and others xpang uh. And I think
Speaker 1: they're granting subsidies to Neo, which is the battery swap company,
Speaker 1: even on its very high end cars, which they are
Speaker 1: not granting to Tesla. So it's obvious, and it has
Speaker 1: always been obvious that China would favor a local producer.
Speaker 1: But what we are seeing from China and particularly Tesla
Speaker 1: is exports into Europe uh where it does not yet
Speaker 1: have a plant. Uh. And what we're hearing is uh,
Speaker 1: the especially in Germany but all over Europe where their
Speaker 1: their standards are extremely high for cars in terms of
Speaker 1: design and performance, that they would prefer cars from Shanghai,
Speaker 1: which is a much newer plant and much more productive,
Speaker 1: much more efficient in terms of these designer perfecting these
Speaker 1: designs than is Fremont. Uh and So I think we're
Speaker 1: seeing a big export market developed from China into Europe.
Speaker 1: Uh and Uh. I think China will like that. China
Speaker 1: wants to be known not for shipping or exporting you know,
Speaker 1: cheap goods, but also high end good So this could
Speaker 1: be the beginning of a trend. So so is China
Speaker 1: risk then for Tesla? I mean as I don't think
Speaker 1: they're going to shut down the factory at all. I
Speaker 1: think that that factory will be much more for exporting
Speaker 1: than we once imagined. I will say that Tesla's cars
Speaker 1: in in China have sold very well until very recently.
Speaker 1: I'm sure the publicity, uh, the publicity it has received
Speaker 1: has cooled cooled uh Tesla's jets in China, but it's
Speaker 1: it's been fortuitous that this export market has opened up
Speaker 1: at the same time. Kept the one thing I want
Speaker 1: to ask you, and we talked about it at the
Speaker 1: beginning inflation, your mentor, you and I talked about this
Speaker 1: just a few weeks ago. Art Laugher, you were in
Speaker 1: your twenties, you know, you were focusing on the economy.
Speaker 1: It was a time where inflation was off the charts,
Speaker 1: and everybody thought it would consistently stay that way. Laugher
Speaker 1: thought differently, And we know well known in the supplied
Speaker 1: side economics. Here we are at another time where the markets,
Speaker 1: the volatility is often guided by our inflation expectations. Is
Speaker 1: inflation going to be a problem in your view? Well, uh,
Speaker 1: we we've been saying for some time, actually since the
Speaker 1: depths of the coronavirus. We were doing YouTube videos, uh,
Speaker 1: saying regularly v shape recovery businesses are way behind consumers.
Speaker 1: Consumers are buying all of these goods. In fact, that's
Speaker 1: all they can do because they're stuck at home. Right,
Speaker 1: So they were buying non durable and durable goods that
Speaker 1: could be shipped to them, right, Uh right, Non, Okay,
Speaker 1: That part of consumption is one third of consumption, and
Speaker 1: a disproportionate amount or percentage of the market basket of
Speaker 1: consumers was in goods. For the past year. Businesses were
Speaker 1: didn't expect it. They were behind even before the coronavirus.
Speaker 1: They had been lagging in terms of capital spending, in
Speaker 1: terms of inventories. They were worried about inverted deal curves
Speaker 1: and China US trade conflict. There were many, many concerns.
Speaker 1: So they've been dragging their feet. They got even further behind.
Speaker 1: Uh and and still haven't caught up. So what's happening now,
Speaker 1: Double triple ordering, maybe quadruple ordering, because they just can't
Speaker 1: get the good companies kind of bying to thank buying.
Speaker 1: And so what I believe is we are setting up
Speaker 1: for a massive period of deflation. Uh Now, let me
Speaker 1: explain that there are three sources of deflation. One is
Speaker 1: when the orders, these double and triple orders are canceled.
Speaker 1: Right now, we have seen lumber correct in the last week.
Speaker 1: I think this is the beginning of that. Copper is
Speaker 1: now starting to correct. And I believe that commodity prices
Speaker 1: went too far too fast as businesses were scrambling and panicking.
Speaker 1: Right they were losing business to competition if they hadn't
Speaker 1: planned their inventories correctly. So that's one source of deflation.
Speaker 1: But that's only cyclical deflation. And we actually didn't expect
Speaker 1: it to start now. We expected it to start later
Speaker 1: in the year. But I guess it makes sense now
Speaker 1: that vaccines are here and consumers are shifting away from
Speaker 1: goods towards services or at the margin. Uh, the writing
Speaker 1: is on the wall. Those are double and triple orders
Speaker 1: are going to be canceled. Prices were too high, and
Speaker 1: we're probably going to see a d up in commodities.
Speaker 1: But there are two other sources of deflation out there,
Speaker 1: and this is what we've been saying for quite some time.
Speaker 1: One has to do with it's a good deflation. It's
Speaker 1: caused by technologically enabled innovation. And we believe when you
Speaker 1: see DNA sequencing costs dropping for every cumulative doubling in
Speaker 1: in genome sequenced, or when you see AI training costs
Speaker 1: dropping thirty seven to fifty per year, these are massive
Speaker 1: deflationary forces that are going to hit every part of
Speaker 1: the economy. AI is going to be everywhere. So that's
Speaker 1: good deflation. Now what's bad deflation. Bad deflation is going
Speaker 1: to hit those companies that are going to be disinter
Speaker 1: intermediated and disrupted by all of the innovation that we
Speaker 1: talk about all the time based on DNA sequencing, robotic
Speaker 1: energy storage, artificial intelligence, and blockchain technology. So companies who
Speaker 1: have leveraged up to satisfy short term or ated shareholders
Speaker 1: who say I want my profits now, I want my
Speaker 1: dividends now, so they buy back their shares, they haven't
Speaker 1: been investing enough in innovation. They are gonna lose if
Speaker 1: they're not lucky, not if there If they are unlucky,
Speaker 1: they will lose their businesses. So, Cathie, what I like
Speaker 1: about you at your consistency and we have been talking
Speaker 1: about these themes right for a long time. Having said that,
Speaker 1: you know, your performance has been really consistent. It's been
Speaker 1: a tougher year this year, and you've had flows out
Speaker 1: of your funds. I was tracking just I think over
Speaker 1: the last week it's almost a billion dollars. So, you know,
Speaker 1: how do you keep your investors kind of energized in
Speaker 1: your philosophy and your thinking and your outlook and confident
Speaker 1: in your strategy, you know, in a moment where there's
Speaker 1: a lot of doubt out there. Yes, well, a couple
Speaker 1: of things, just in terms of flows in our our
Speaker 1: biggest outflows were in March. There are a lot of
Speaker 1: commentators out there, shall I say, screaming about how e
Speaker 1: t f s would have to our our e t
Speaker 1: f s would have to shut down, which is impossible.
Speaker 1: And they just don't understand the E t f uh
Speaker 1: infrastructure surrounding us. Um, it's a beautiful thing. Let me
Speaker 1: tell you, the flows are no problem. Our spreads have
Speaker 1: not moved. But anyway, beyond that, Um, what has happened
Speaker 1: is our price targets for the next five years, that's
Speaker 1: our investment time horizon have not changed, right, Uh, but
Speaker 1: not at all. Yeah. Not. In fact, some of them
Speaker 1: have gone up as quarterly results have come out. Now
Speaker 1: they're not going to change that much because that one
Speaker 1: quarters result is not going to change a five year
Speaker 1: price target by that much. But the forces that the
Speaker 1: coronavirus put in motion supporting all of the innovation, uh,
Speaker 1: that in which we invest, they are not they're not
Speaker 1: looking back. Uh. And so what we are seeing is,
Speaker 1: you know, a thirty to forty discount to peak prices
Speaker 1: in in February for the same price targets. So we're
Speaker 1: looking at this saying, all right, on sale. Innovation is
Speaker 1: on sale. And oh, by the way, the bull market
Speaker 1: has broadened out, it has it is now embracing value
Speaker 1: and more cyclical stocks. So what has happened is the
Speaker 1: bull market has broadened, has strengthened, and that is using
Speaker 1: usually a launching pad for our next move up. This
Speaker 1: happened if I can just say two thousand sixteen, same thing,
Speaker 1: fourth quarter of sixteen, after Trump, against all expectations, was elected. Uh,
Speaker 1: value stocks took off because we're gonna have a big
Speaker 1: cycle tax cuts, right, and our strategy went down. We
Speaker 1: were negative. But what happened was two thousand seventeen was
Speaker 1: one of our best years ever, saved last year. Uh,
Speaker 1: and that's because the bull market had broadened out, include
Speaker 1: did value cyclicals were taking off, and the economy was
Speaker 1: on the end. Our economy is very strong right now,
Speaker 1: and cyclical earnings growth and revenue growth is a competition
Speaker 1: to innovation. But if we're right on what's happening with
Speaker 1: commodity prices right now, and that's going to be extended,
Speaker 1: that is the ticket to the next move in our
Speaker 1: kinds of stocks. Well, it's interesting too, what about the
Speaker 1: the tech underperformance, Kathy, that we've seen how much longer
Speaker 1: do you think you know we see that? Well, you
Speaker 1: can never say when we've hit bottom. I mean, I
Speaker 1: can tell you that the valuations in in our in
Speaker 1: our portfolios would suggest that over the next five years, again,
Speaker 1: if our research is correct, no promises. Uh, we believe
Speaker 1: that our portfolios will more than triple over the next
Speaker 1: five years, so that more than a twenty five compound
Speaker 1: annual rate of return over the next five years. Actually
Speaker 1: it's approaching thirty after today. Uh. So you know I'm
Speaker 1: looking at that with great confidence because these innovation platforms
Speaker 1: have hit escape velocity and they there is no turning back.
Speaker 1: There is no turning back because they are helping businesses
Speaker 1: uh and consumers back. Ye little free Sorry, there we go.
Speaker 1: You're back. Go ahead, No, that's okay, we're phrasing up.
Speaker 1: Go ahead. Please, We're not going back to the old
Speaker 1: world We're not going back to the old worlds. So
Speaker 1: you know, my confidence has only increased in our strategies.
Speaker 1: Can I ask you why did you guys get out
Speaker 1: of Apple? Your position in Apple? Okay, what we do
Speaker 1: when a bull market is as extended as as the
Speaker 1: move into our type of stock was, is as that
Speaker 1: move happens, we start, Uh, we're freezing up a little bit.
Speaker 1: Let's see if we can get Cathy back. That's okay.
Speaker 1: Innovation it's happening, but not always when it comes to that.
Speaker 1: The virtual conversation go ahead, and you're talking about Apple.
Speaker 1: So Apple was one of our cash like instruments. It's
Speaker 1: an innovative company. Uh, it's in in in the innovation zone,
Speaker 1: but it's characteristics are very defensive. So we will add
Speaker 1: names like Apple, the things Apple, Google, Facebook, we will
Speaker 1: add those, uh, add to those positions or even reintroduce
Speaker 1: those stocks as a bull market our our portfolios. We're
Speaker 1: up a hundred and fifty. We knew there was going
Speaker 1: to be a correction and we just wanted to have
Speaker 1: very liquid stocks. Apple is a great company, is going
Speaker 1: to do fine. Uh, it's a fang. It's in a
Speaker 1: lot of portfolios. We are all about the next fangs,
Speaker 1: but we will use the existing thangs. If you see
Speaker 1: they are acting very defensively, become a defensive group. So
Speaker 1: we will fold them in increase them. When we see
Speaker 1: a move like we saw last year. When we see
Speaker 1: a decline like the one we're seeing now, we're seeing
Speaker 1: much higher returns from the other stocks in our portfolio.
Speaker 1: You know, you're talking about um kind of value and cyclical,
Speaker 1: And I'm curious, are there any value and cyclical strategies
Speaker 1: right now that you guys have identified as one you
Speaker 1: want to pursue. Well, in our space strategy r k X,
Speaker 1: you'll find a lot of value oriented stocks. Uh. Many
Speaker 1: people are surprised to see dear for example, in there,
Speaker 1: And what they don't understand is thanks to satellite technology
Speaker 1: and UH. And and that the increase in the number
Speaker 1: of satellites out there and the and the precision that
Speaker 1: we're getting from them, we are now enabling precision agriculture
Speaker 1: with autonomous tractors and drones. So without without that constellation
Speaker 1: out there, that would not be happening. We think that
Speaker 1: the two biggest applications or are beneficiaries of the space
Speaker 1: race are satellites going to enable mobile connectivity or connectivity
Speaker 1: around the world, broadband conductivity. It is really hard for
Speaker 1: us to imagine that three billion people in the world
Speaker 1: have no access to the Internet or broadband. This is
Speaker 1: going to enable that satellites and also farming. UH. And
Speaker 1: the other thing we think is is going to happen
Speaker 1: much sooner than space tourism or it will be a
Speaker 1: much bigger deal into of revenue generation is hypersonic flight.
Speaker 1: So any aerospace company focused on hypersonic flight we're interested in.
Speaker 1: And there they tend to be the coasts you mentioned earlier.
Speaker 1: There have been people who have been very vocal and
Speaker 1: public fans of you, and then some now have become
Speaker 1: your critics or they criticize you know, having a younger investment,
Speaker 1: and you know a group of analysts, your analyst team,
Speaker 1: what do you say to them? I would say, that's
Speaker 1: our secret weapon. Those analysts have their uh, their education
Speaker 1: and their feet in the New world. The most seasoned
Speaker 1: analysts healthcare analysts on Wall Street, and God bless them,
Speaker 1: they've been great at what they do anything. They know
Speaker 1: all the code words and how to decipher them from
Speaker 1: the FDA, but they probably haven't experimented with Cristopher gene
Speaker 1: editing like our genomic analysts have, and they don't have
Speaker 1: advanced degrees in cognitive computing, including bringing behavioral science into it.
Speaker 1: So uh, many of our analysts are coming to us
Speaker 1: directly from college, and they are fully equipped with domain
Speaker 1: expertise in a way that most analysts out there. Again,
Speaker 1: very seasoned are not just because they didn't go to
Speaker 1: school and haven't been exposed to these new technologies. Now.
Speaker 1: I know there are a lot of PhD s out there,
Speaker 1: and they of course know a lot. But I would
Speaker 1: put any of our analysts up against the most seasoned
Speaker 1: analysts on the street when it comes to the topic
Speaker 1: of innovation and new technologies, right, that's our focus, and
Speaker 1: so why wouldn't we. I think we have a competitive
Speaker 1: advantage for a few reasons. Number one are analysts their
Speaker 1: domain expertise. Uh Number two are their willingness to engage
Speaker 1: with the communities out there through social media and give
Speaker 1: our research away not one of finish but as it's evolving,
Speaker 1: so that they can communicate and engage with the innovators themselves.
Speaker 1: Uh So, I think we have a competitive dynamic unmatched
Speaker 1: out there in the industry. Hey, just to wrap up, Kathy,
Speaker 1: and you've you're not been talking for for a lot
Speaker 1: of years. This has kind of been a year that's unusual.
Speaker 1: I would I would say, in some regards for you,
Speaker 1: what have you learned in the past year and what
Speaker 1: has maybe change mean to you? Well, As we were
Speaker 1: having such an incredible year last year, and I do
Speaker 1: think the coronavirus crisis caused it innovation solves problems. I
Speaker 1: kept saying to everyone, this will not everyone in the company.
Speaker 1: We must stay humble. We must stay humble, and we
Speaker 1: must we we know this is going to come to
Speaker 1: an end. We're going to go through a severe correction,
Speaker 1: and we have to just keep our heads down, focused
Speaker 1: on our research to uh to keep our conviction and
Speaker 1: and and drive our strategies forward. That's what's happened, keeping
Speaker 1: our heads down, hopefully staying humble, and really trying to
Speaker 1: educate people the great opportunities available out there get on
Speaker 1: the right side of change. This is going to be
Speaker 1: the most amazing period of my investment career and I've
Speaker 1: been through forty plus years, because we've never seen five
Speaker 1: innovation platforms evolved at the same time, all of them
Speaker 1: leading to exponential growth trajectories that are going to transform
Speaker 1: people's lives. And so I say, just you know, uh, uh,
Speaker 1: read our research, uh, talk to our analysts on Twitter
Speaker 1: if you really want to learn more and and and
Speaker 1: join the ride, because we believe it's going to be magnificent.
Speaker 1: Just quickly from the audience, do you ever get recognized
Speaker 1: in public like a celebrity? Some people like you need
Speaker 1: to Warren Buffett and do you ever miss kind of
Speaker 1: your pre rock star Day's just quickly Um, the answer
Speaker 1: is yes, too much to my surprise, even in an
Speaker 1: island off of New Zealand, which is what uh but
Speaker 1: UH and no, we are honored and delighted because you
Speaker 1: know what, and I know it's been hard for our
Speaker 1: clients in recent months keep the faith, but many people's
Speaker 1: lives have been changed by what happened last year. They
Speaker 1: put their uh, they allocated resources towards our strategies, towards
Speaker 1: bitcoin and UH, and they had a magnificent run. So
Speaker 1: it's gratitude that we feel now. Of course we're feeling
Speaker 1: very responsible of course this year, but that's why it's
Speaker 1: so important for us to say. You know what pains
Speaker 1: me more than anything as a portfolio manager is when
Speaker 1: I know our clients are selling at the bottom, and
Speaker 1: it usually is that people sell the big capitulation that
Speaker 1: I described earlier with bitcoin is selling at the bottom,
Speaker 1: so you make a terrible mistake and you don't want
Speaker 1: to ever get in again. And it just pains me.
Speaker 1: So I'm just praying that we don't have a lot
Speaker 1: of that. We've had a lot of retention. Just to
Speaker 1: correct one thing you said at the beginning. Uh, Actually,
Speaker 1: as a firm, we've not had one month of redemptions.
Speaker 1: The E t F platform had if you go month
Speaker 1: end to month end, which is how we measure this
Speaker 1: sort of thing. Our regions in March were five million.
Speaker 1: We had we we've had positive flows in April. May.
Speaker 1: It remains to be seen. It's been nip and Tucket
Speaker 1: may end up being a small depends on what happens
Speaker 1: in these last few weeks. But you know, if there's
Speaker 1: real capitulation, sure we could have a big outflow, but
Speaker 1: I think that's capitulation.